The Very Reverend Michael Sadgrove, the son of a Jewish war refugee and a Sunderland supporter, said he was struggling to stay loyal to the club and that he found Di Canio's "self-confessed fascism deeply troubling".

Di Canio refused to confirm or deny whether he was a fascist at a news conference yesterday but has previously stated he is "a fascist but not a racist".

He has also been pictured giving a fascist salute to Lazio 'ultras' and photographed attending the funeral of a leading Italian fascist.

In his open letter to Di Canio, the Dean of Durham wrote: "Your appointment raises very difficult questions. You see, I am the child of a Jewish war refugee who got out of Germany and came to Britain just in time. Some of her family and friends perished in the Nazi death camps. So I find your self-confessed fascism deeply troubling.

"Fascism was nearly the undoing of the world. It cost millions of innocent lives. Mussolini, who you say has been deeply misunderstood, openly colluded with it. You are said to wear a tattoo DUX which speaks for itself. This all adds up to what I find baffling.

"You say that you are not a racist, but it needs great sophistication to understand how fascism and racism are ultimately different. I can promise you that this distinction will be lost on the people of the North East where the British National Party is finding fertile ground in which to sow the seeds of its pernicious and poisonous doctrine.

"You did not necessarily know this before you came. But I believe that unless you clearly renounce fascism in all its manifestations, you will be associated with these toxic far-right tendencies we have seen too much of in this region."

Sadgrove said he was "genuinely perplexed" as to why Di Canio had refused to clarify his political beliefs and warned that the club now stands to lose support and respect at home and abroad.

He added: "Please tell me that I have misunderstood, or missed some fundamental issue here. I am simply telling you with a heavy heart that it feels hard at the moment to stay loyal."

Di Canio, the former Swindon manager, has the word "Dux", the Latin equivalent of "Duce", tattooed on his arm - a reference to Il Duce's Benito Mussolini.

He told the Italian news agency Ansa in 2005: "I am a fascist, not a racist.

"I give the straight arm salute because it is a salute from a 'camerata' to 'camerati'," he said, using the Italian words for members of Mussolini's fascist movement.

"The salute is aimed at my people. With the straight arm I don't want to incite violence and certainly not racial hatred."

At a news conference yesterday, Di Canio blasted the furore over his appointment as Sunderland manager as "ridiculous and pathetic" and warned that he may not speak to media who continue to question him on the subject.

He said: "My life speaks for me so there is no need to speak any more about this situation because it's ridiculous and pathetic.

"We are in a football club and not in the House of Parliament. I'm not a political person, I will talk about only football."

His appointment led to the resignation of the club's vice-chairman David Miliband, Labour MP for South Shields and former foreign secretary, and the Durham Miners' Association has asked the club to return a symbolic banner which is kept at the Stadium of Light if Di Canio remains in his post.

In his letter, Sadgrove said he and his family have been supporters of Sunderland for decades and that football and politics could not be separated.

He added: "It is no answer to plead that this press call was about football, not politics. Where a Premier League club is concerned, you can't ever separate the two.

"Politics and high-profile sport, like religion, are about the whole of life. Football is deeply political. To say otherwise may be convenient, but it's naive.

"Premier League players and managers are big role-models for the young. Is fascism what you or Sunderland FC want our children and teenagers to admire and emulate? And if this doesn't trouble you personally, should it not trouble those who appointed you?"